Aligning an organization's strategy and structure

Why is it important for an organization to have alignment between its strategy and organizational structure?

How can a firm lower the chances that key managers will pursue their own self-interest at the expense of the stockholders? At the expense of the employees?

Solution Preview

A business strategy is nearly impossible to achieve without alignment with the organizational structure. With a wide pyramid structure, with a multitude of managerial levels, the result may likely be an inability to make rapid changes. For example, a CEO receives customer feedback that customer service representatives must always "pass" them to a supervisor for what is considered "routine" refund or exchange requests. The resulting strategy may be to set a dollar amount of latitude for the representatives to grant such transactions without supervisory approval. However, if the representatives report to team leads, who in turn report to shift supervisors, who are accountable to sales managers, that report to sales and marketing ...

Solution Summary

This solution is over 450 words and explains why it is important for an organization to ensure there is alignment between strategy and employee structure. There is also an analysis on how to lower the opportunity for key managers to engage in actions that are self-serving at the expense of stockholders.